First time buyers 'to face continued price growth'

21-Aug-2007

Suggestions that recent interest rate rises have precipitated a significant slowdown in the housing market and could thus aid first time buyers are wide of the mark, new figures imply.

While the latest Assetz House Price Watch has noted that the annualised rate of growth fell from 11.2 per cent in June to 10.1 per cent last month, the firm has advised that continued supply shortages will bolster the market in the long-term.

And while an end to interest rate rises could introduce a degree of stability to borrowing options, it could also mean that price growth is not reduced as much as some may have hoped, Assetz chief executive Stuart Lee added.

"We are likely to now witness a stabilisation in interest rates, with a downward turn a realistic possibility for the not too distant future," Mr Lee commented.

"House sales should now pick up as consumer confidence increases and inflation begins to stabilise annual price growth to around eight per cent by the autumn," he added.

For now it seems that first time buyers will have to continue to rely on innovative mortgage and housing offers if they want to get onto the property ladder without overstretching.

"If house prices continue to rise, there will be no real respite for those wanting to buy a first home," commented Helen Adams, Managing Director of First Time Buyers’ advice centre FirstRungNow.com.

"They will need to rely on parents and creative lending to be able to take that first step.

"We would like to see the government take interventionist steps to help first time buyers, the life blood of the market," Ms Adams added.

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